Decarbonising to Compete: pathways to unlock investment and strengthen Brazil’s low-carbon cement and steel industries

New report identifies opportunities and mechanisms to mobilise capital

Key highlights 

• New Climate Bonds report, funded by UK PACT, identifies cement and steel as strategic sectors for Brazil’s industrial decarbonisation and long-term competitiveness.
• Brazil’s renewable energy matrix, biomass use and policy momentum position the country to lead the transition in hard-to-abate industries.
• Electrification, low-carbon hydrogen and carbon capture and storage, combined with near-term efficiency measures, are critical to reducing emissions at scale.
• The report highlights financing opportunities, policy instruments and market mechanisms needed to mobilise capital and unlock investment. 

 
Sao Paulo, 10 February 2026, 9am — Climate Bonds Initiative has launched a new report, Decarbonising to Compete: Towards a Low-Carbon Cement and Steel Industry in Brazil, funded by UK PACT, analysing the technological, policy and investment pathways required to accelerate the decarbonisation of two of Brazil’s most emissions-intensive and economically strategic sectors. The report provides local solutions for a global problem. 

Decarbonising to Compete 

As foundational pillars of Brazil’s civil construction and national economy, cement and steel together represent 18% of the world's greenhouse gas emissions. The report states that decarbonising these sectors is not only a climate imperative, but a strategic opportunity to strengthen industrial competitiveness, attract sustainable finance and position Brazil as a global leader in low-carbon industrial production. 

Drawing on market analysis, policy review and investment insights, the report outlines how Brazil’s comparative advantages, including a predominantly renewable electricity matrix and long-standing use of biomass in steelmaking, can be leveraged to accelerate the transition. It assesses both short-term, cost-effective measures, such as energy efficiency improvements and fuel substitution, and longer-term solutions, including electrification, low-carbon hydrogen and carbon capture and storage. 

Leonardo Gava, Brazil Country Manager at Climate Bonds Initiative, said:   
"Decarbonising the cement and steel sectors represents a strategic opportunity for Brazil to enhance its competitiveness in a rapidly evolving global economy. The report showcases local policies, challenges and opportunities for the transition that are feasible and strategic for the country. With the right combination of policy signals, credible standards and access to finance, Brazil can turn industrial decarbonisation into a driver of innovation, investment and long-term economic leadership." 

The report also examines the role of green finance instruments, carbon pricing, public procurement and regulatory frameworks, highlighting how mechanisms such as green bonds, sustainable credit lines, and climate funds can help mobilise the scale of investment required. International developments, including the EU Carbon Border Adjustment Mechanism (CBAM), are identified as key drivers reinforcing the business case for early action. 

As Brazil advances initiatives such as its National Industrial Decarbonisation Strategy, Brazilian Sustainable Taxonomy and regulated emissions trading system, the report underscores the importance of coordinated policy action and credible standards to reduce investment risk and unlock private capital. 

Finally, there are actionable recommendations for policymakers, investors and industry stakeholders, setting out a roadmap to support a fair, competitive and resilient industrial transition aligned with Brazil’s climate commitments and net-zero ambitions. 

The full report is available to download here. 

<ENDS> 

Contact for interviews and further information: 

Leticia Braga 

Communications Specialist, Climate Bonds Initiative  

leticia.braga@climatebonds.net 

Notes for journalists: 

About the Climate Bonds Initiative: Climate Bonds is the leading international non-governmental organisation mobilising global capital for climate action. We drive the growth of the green and sustainable debt market through science-aligned frameworks including our taxonomies and standards, our Certification, our data and insights, and our provision of expert policy and technical advice. More information on our website here. 

About UK PACT: UK PACT (Partnering for Accelerated Climate Transitions) is a UK government capacity building programme, jointly funded by the Foreign, Commonwealth, and Development Office (FCDO) and the Department for Energy Security and Net Zero (DESNZ). The programme partners with countries around the world to increase ambition and accelerate low-carbon transitions. This is achieved through the provision of technical assistance, often through UK public sector organisations, which strengthens institutions and generates inclusive and lasting impact. This impact covers the sectors of climate policy and governance; energy transition; green finance; agriculture, forestry, and other land use (AFOLU); and mobility.